Do it yourself

The empirical evidence in India suggests that the returns from a SIP stabilize around the underlying asset's long term average return. I analyzed the Nifty50 data from 01 January 2001 to 01 November 2025. I assumed various investors invested a fixed amount at beginning of each month for a tenure of 299 months (25yrs), 240 months (20yrs), 180months (15yrs), 120 months (10yrs), 60 months (5yrs) and 36 months (3yrs). Actual Nifty50 data (closing price on first day of each month) was taken for the sake of convenience, assuming dividend yield cancelled the fund management charges and tracking error (for ETF investors) and brokerages and impact cost for direct equity investors. The analysis indicates that an SIP in Nifty50 started to outperform the Nifty50 index return only after 7 yrs. The outperformance peaked around 180 months (15yrs) and started to decline. For 20 yrs tenure, Nifty50 monthly SIP returns (CAGR) is almost same as the change in Nifty50. For 25 yrs tenure, SIP returns ou...

Continuing from yesterday (see De-institutionalization of household savings ) It is important to note that investors moving away from passive investing to active investing is not an India specific phenomenon; rather it is a global shift. For example, there is massive outflow of funds from equity mutual funds in US, while benchmark indices have been scaling new highs. This outflow of funds has coincided with the tremendous rise in "Robinhood" investors - people buying and selling stocks directly on discount brokerage platforms. As Sanjay Satapahty, a fund manager at Ampersand Capital, highlights "Trend of ETF was a megatrend over last decade and the reversal can have huge implications." ( see here ) In past five months we have seen some glimpses of the likely implications for the market, should the shift from passive investing to active investing sustains over a longer period. Since the market bottom in March 2020, the small cap...

The government of India has been the greatest value destroyer for the investors in Indian Equities. The Nifty PSE index, comprising most listed PSU stocks, now trades at the same level as it was in 2006, implying no return for 13yrs, if we consider point to point investment period. The CPSE ETF comprising top 22 Central government undertaking stocks, launched in 2014 is giving negative return to its investors. Many large Public Sector companies are now trading at multi year low prices, adjusted for all dividends and other corporate actions. The government of India therefore has legal and moral duty to explain to the investors, why it should continue to manage these businesses. They have obviously not managed these great businesses like MTNL BEL, Coal India, etc well and destroyed huge wealth for the nation as a whole and individual investors as well. The Supreme Court may like to examine, whether the government should be permitted in the first place t...